February 26, 2010 / 3:41 PM / 10 years ago

UPDATE 1-US January existing home sales unexpectedly plunge

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By Corbett B. Daly

WASHINGTON, Feb 26 (Reuters) - Sales of previously owned homes in the United States unexpectedly plunged in January, an industry survey showed on Friday, fresh evidence the housing market has yet to find stable ground.

The National Association of Realtors said sales fell 7.2 percent from December’s level to an annual rate of 5.05 million units, sharply below market expectations for a 5.50 million unit pace.

December sales were revised slightly lower to a 5.44 million pace from 5.45 million units. Compared with a year ago, last month’s sales of existing homes were up 11.5 percent.

The median sales price was unchanged from a year earlier at $164,700.

“Today’s figure is certainly not good news in terms of sales,” said Lawrence Yun, chief economist for the NAR.

Sales fell in all regions of the country. In the Northeast they fell 10.9 percent to an 820,000 unit annual pace while in the Midwest sales fell 6.9 percent to a 1.08 million unit pace.

Sales in the South, the country’s largest region, fell 7.4 percent to a 1.87 million unit pace, and in the West sales fell 5.2 percent to a 1.28 million unit pace.

Distressed sales accounted for 38 percent of sales, sharply higher than December’s 32 percent.

Yun said all cash deals represented about a quarter of all sales, sharply higher than the normal level of about 10 percent, a signal that investors are a key component of sales and traditional buyers are still skittish.

He added that he expected foreclosures to continue to rise in 2010.

Reporting by Corbett B. Daly; Editing by James Dalgleish and Dan Grebler

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